AUGUST 22! Today marks the longest bull market in history! We've now been in the current Bull Market for 3,453 days.
What's next? Well, no one can predict the direction the market will take next (and don’t let anyone try to tell you otherwise.) It doesn’t matter if someone calls themselves an expert or analyst.
No matter what stage of life you’re currently in, it's fun to be at the top, but the eventual market drop will affect you in different ways. Let's talk about planning for the drop and how this record-breaking news impacts you.
Looking at 2018, the market’s been behaving oddly. We hit a high point in January and have plateaued. By and large, growth has been stagnant, as opposed to 2017’s explosive growth.
There’s no use sitting around and waiting for the shoe to drop, and I’m not a doomsday advocate, but please believe me that a market drop will eventually come.
But an eventual market drop is not the end, it’s the beginning. With the proper planning, you can control your destiny and position yourself to ride out the storm.
consider this in the record-breaking bull market
especially if you are Close To Retirement
If you’re over 50 and retirement is well within your reach, you need to understand sequence of returns risk for market-based retirement funds. I have to preface that’s it’s not the most glamorous of topics, but there is no reason to be intimidated if it sounds foreign to you.
Here’s the best way I can explain it. Check out the two sets of numbers:
Now let's reverse it:
My question to you: When retirement comes along, which set of numbers do you want to receive your returns?
Most people would look at the two sets and conclude that it doesn’t make a difference because the numbers are the same just in a different order.
Wrong! It makes a massive difference.
For the person who retires and experiences the returns in the first set of numbers is riding high in their retirement portfolio in the first three years. Even though they’ll hit the negative years, their compounded growth far exceeds the deficit. We call this the retirement red zone and it dictates the rest of your retirement.
Whereas starting retirement with the second set of numbers buries you in such a deep hole that you’ll never recover.
I know that the decision to retire isn't always in your control, but if retirement is imminent and your portfolio is what I’d consider risky--loaded with stocks and equities-- we should connect and discuss an appropriate level of risk based on who you are.
but, Even if retirement is a ways off...
If your parents are nearing retirement, it’s not a bad idea to have a casual chat about this topic.
Don't allow this topic to be taboo. The best thing you can do is bring up a conversation.
Our Passion Is Your Plan For Life
You’re so much more than numbers and graphs, so it’s our team’s passion to look at who you are, get to know you as a person, learn your goals and inject a happy amount of risk into your world.
To wrap this up in a tidy bow, this isn’t easy. Investing mistakes, no matter the season of life, are costly and can have disastrous outcomes. Frankly, when your livelihood hinges on the health of the market and you’re watching it take a nosedive, it’s not natural to keep the faith and see it through.